ADVISER WHO SOLD MILLIONS OF DOLLARS IN NON-EXISTENT BONDS FACES REVOCATION OF REGISTRATION

AUSTIN, Texas – The Inspections & Compliance Division of the State Securities Board has requested that Houston investment adviser Brian Anthony Bjork and his firm, Select Asset Management LLC (SAM), have their state registrations revoked. Bjork and Select Asset sold millions of dollars worth of non-existent corporate bonds through the J. David Salinas Financial Group of Friendswood.

The relief is sought in the Notice of Hearing filed Aug. 1 at the State Office of Administrative Hearings.

The Securities and Exchange Commission is investigating J. David Financial and on Monday filed a lawsuit in U.S. District Court in Houston to freeze the assets of Bjork, SAM and related entities, and the estate of Salinas. The SEC suit also asks for the appointment of a temporary receiver to oversee the companies.

J. David Salinas was president of the J. David Financial Group until his death by suicide on July 17. Salinas and J. David Financial were not registered with the State of Texas to do business as investment advisers.

Salinas was known in basketball circles as the founder of the Houston Select Amateur Athletic Union basketball program and as a donor to the athletic programs at the University of Houston and Rice University.

The Inspections & Compliance Division alleges that Bjork and SAM told their clients they could buy corporate bonds for the clients' accounts through J. David Financial Group. "As a result . . . clients invested millions of dollars believing that (Bjork and SAM) were buying corporate bonds with the funds," the hearing notice states.

Bjork and SAM also recommended and sold their clients interests in private investment funds. Clients invested millions of dollars in these funds without knowing the funds made undisclosed loans to affiliated companies.

Besides serving as CEO of Select Asset Management, Bjork was an officer of J. David Financial until earlier this year. After Select Asset Management started doing business in 2007, Bjork continued to tell clients he was purchasing corporate bonds for them through J. David Financial, according to the notice of hearing. Bjork did not purchase the bonds, however, and neither did Salinas or J. David Financial.

By misrepresenting the bond purchases, Bjork and SAM engaged in fraudulent business practices, according to the notice of hearing.

Bjork and SAM also failed to comply with the terms of a Disciplinary Order the Securities Commissioner entered against him in 2008, the hearing notice says. The Order required Bjork and SAM to retain an independent outside compliance specialist to review his marketing, regulatory filings, and check the registration status of SAM employees.

The hearing notice alleges that Bjork never hired a compliance specialist. The notice also alleges that Bjork misrepresented himself to the Securities Commissioner when he filed regulatory updates that said his business activity on behalf of the J. David Group of companies was "not investment related."

The State Securities Board's Inspections & Compliance Division acknowledges the assistance and cooperation of the Securities and Exchange Commission.